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Malloy's proposalReturn $155 million to residentsPlow $250 million into the state's emergency reserve fundPut $100 million into the state's under-funded pension plan, a move that over 20 years could save taxpayers as much as $430 millionGive checks for $55 to earners making less than $200,000 last year Give $110 to joint filers with earnings under $400,000

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DERBY -- Gov. Dannel P. Malloy came to the state's smallest city Thursday to offer up an election-year menu of ways to spend Connecticut's projected half-billion-dollar budget surplus.

In what he's calling a "shared recovery" for the middle class -- following the largest tax increase in state history back in 2011 -- Malloy said he wants to make permanent his strategies for using future budget surpluses.

Individuals who earned less than $200,000 last year would get checks for $55 under the governor's budget, while joint filers under $400,000 in pay would get $110 under the proposal, which Malloy will present to the General Assembly next week.

In reaction, the director of the University of Connecticut's Center for Economic Analysis said that as many as 1,500 jobs could be created by the $155 million rebate.

Minority Republicans, while conceding that the rebate is acceptable, charged that Malloy is ignoring the state's longer-term budget challenges.

Malloy will also ask lawmakers to put $250 million into the state's emergency reserves and invest $100 million in the state employee pension funds that over the next 20 years can grow to as much as $430 million.

Malloy called the rebates a "modest" return for consumer payments in state sales and gasoline taxes. He promised that his upcoming budget request will eliminate projected billion-dollar deficits in future fiscal years.

"This three-pronged plan is part of a responsible shared vision of relief," Malloy told reporters in a City Hall news conference presided over by Mayor Anita Dugatto. "I am also introducing legislation this year that mandates that all future surpluses be used only for three specific purposes: to bolster the Rainy Day Fund, to pay down long-term debt and to provide some measure of tax relief."

The Democratic governor's proposal, with the backdrop of this tiny, five-square-mile Naugatuck Valley community of about 13,000 residents, came a week after minority Republicans proposed returning $247 million to state residents and businesses.

But with 98-53 and 22-14 Democratic majorities in the House and Senate, respectively, Malloy's plan, which will be formally presented during his State of the State budget address on Feb. 5, has a better chance of ultimate passage than the GOP's proposals.

Speaker of the House Brendan Sharkey, D-Hamden, said Thursday he supports the governor's plan.

"I've been advocating for putting our current surplus toward long-term debt reduction and beefing up our Rainy Day Fund because it will help protect future taxpayers, so these investments make sense," Sharkey said in a statement. "A sales and gasoline tax refund at this time will also provide some immediate relief for people without impacting future budgets."

"You don't want to change the tax structure because in the out years (following the 2014-2015 budget), we're heading for deficits," Carstensen said, adding that the rebate structure means the $55 and $110 checks would not be taxable income.

"It's exactly the right way to handle it," Carstensen said in a phone interview. He said the $155 million can be translated into 1,000 to 1,500 new jobs at a time when Connecticut saw only 11,000 new jobs in 2013.

House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, who introduced the Republican plan last week, said Thursday that the rebate is "a good thing," but "typical of election-year tactics."

He conceded that the investments in state pensions and the emergency reserve called the Rainy Day Fund were "more responsible" than the rebates.

The state's last major tax refunds were in 1998 -- also a gubernatorial election year -- and 1999.

"Anytime we are talking about giving tax revenues back to the people who earned them, it is a good thing,'' Cafero said in a statement from his Capitol office. "But this proposed tax rebate is perhaps the least-creative option. I'm glad to see that Gov. Malloy stuck to the Republican principle of not using this so-called 'surplus' money to blow even greater holes in future budgets," Cafero said.

The Republican plan would speed up the scheduled tax exemption on clothing and footwear; exempt non-prescription drugs from sales taxes; and end a $60 million special unemployment-tax assessment on all businesses.

Remaining parts of the surplus would go into the Rainy Day Fund and to reduce long-term debt.

Veteran state Rep. Themis Klarides, R-Derby, said despite Malloy's statements to the contrary, the state is looking at a $1.1 billion deficit in the budget that starts July 1, 2015.

"I'm pleased the governor has finally recognized that Connecticut families are in need of tax relief," Klarides said. "One budget cycle ago, he signed off on the largest tax hike in state history -- increasing everything from income tax, to sales tax, to corporate tax -- and now is doing an election year about-face, hailing tax relief as a priority. 'Rebates' sounds great in a sound bite, but we're still stuck in a pattern of going from fiscal crisis to crisis, refusing to address the structural shortfalls at hand."

Senate Minority Leader John McKinney, R-Fairfield, who is seeking the GOP gubernatorial nomination, recalled Thursday that the 2011 tax hikes included raising the sales tax from 6 percent to 6.35 percent and an increase on income and gasoline taxes, as well as a $200 reduction in the state's property-tax credit.

"Working families, small businesses and our economy in general need tax relief, but that relief should be permanent," McKinney said. "If the governor believes, as I do, that Connecticut families need real relief from his high sales taxes and gas taxes, then make the necessary spending cuts and lower the sales tax and gas tax permanently. A one-time 'sales and gas tax rebate' from the governor who gave us permanent tax hikes in both the sales and gas tax is the height of hypocrisy."